Sotheby’s to Russian Billionaire Dmitry Rybolovlev: You Have No One to Blame but Yourself

Russian billionaire Dmitry Rybolovlev finished his initial testimony Friday in the Accent Delight International v. Sotheby’s trial currently ongoing in the United States District Court for the Southern District of New York. 

Speaking to ADI’s attorney, Rybolovlev outlined how he learned of the fraud that he alleges was perpetrated against him by Swiss art dealer Yves Bouvier, who, Rybolovlev contends, was in cahoots with the auction house Sotheby’s to overcharge him by $1 billion for artworks.

According to Rybolovlev, after years of contentment with Bouvier and the works that the dealer helped him acquire, he grew suspicious when the Viennese outlet Der Standard reported in September 2013 that Sotheby’s had sold Gustav Klimt’s Water Serpents II (1907) for $120 million in 2012. That couldn’t be right, Rybolovlev thought at the time. He’d bought it from Bouvier for $183.3 million that same year. Rybolovlev’s business manager Mikhail Sazonov was clued-in to the story by Bouvier, who assured him that their transaction was on the up and up, according to Rybolovlev’s testimony.

Then, in 2014, the New York Times reported on the private sale of the freshly-attributed-to-Leonardo da Vinci work, Salvator Mundi, for between $75 million and $80 million. Rybolovlev, though an intermediary company, had also bought that work from Bouvier, but for $127.5 million. 

Rybolovlev approached Bouvier, he said, who assured him again, saying that journalists never know the actual price something sells for and, besides, there were dealer markups and other expenses to be considered.

(Bouvier, who is not a party to the ongoing trial, has repeatedly denied any wrongdoing, has never been convicted of a criminal offense related to his business dealings with Rybolovlev, and in December he and the Russian billionaire reached a settlement over various legal disputes in Switzerland.)

“It was then doubts began to linger,” Rybolovlev said. Especially because, Rybolovlev says, he’d asked Bouvier to sell off some of his acquisitions, a project Bouvier had at that point been unsuccessful in because of problems in “the market,” an answer that Rybolovlev says left him wondering if he’d overpaid for the art. 

That same year, during lunch with a friend at the Eden Rock Hotel in St. Barths, Rybolovlev met art adviser Sandy Heller—famously hedge-fund billionaire Steve Cohen’s adviser—who he soon put on retainer. During their meal, it came up that Heller had been on the selling side of a Modigliani picture Rybolovlev had just purchased via Bouvier. 

“Then Heller quoted me a different, higher price than Bouvier had,” Rybolovlev said in court. “The mutual friend we were dining with thought I’d had a heart attack. I was turning pale. I quickly understood that this was the case for more than one painting.”

At the end of the plaintiff’s attorney’s questioning, Rybolovlev said he was angry: at Tania Rappo, whom he thought was a friend; at Bouvier, for supposedly lying to him; and at Sotheby’s for, in his view, helping trick him. He said that, at the time, his trust in Bouvier and Sotheby’s was absolute.

“Sotheby’s makes it difficult for people like me, who are experienced in business, to know what’s going on. [This lawsuit] isn’t about the money.” Rybolovlev said. “It’s important for the art market to be transparent. When the largest most respected business in the industry can be involved in secrets like these, their clients don’t stand a chance.”

The fact that Rybolovlev ultimately paid whatever price Bouvier quoted, and in whatever manner Bouvier suggested was a central focus of Sotheby’s attorney Marcus Asner. After restating Rybolovlev’s clarion call for transparency, Asner reminded him that he kept his identity secret from sellers at every turn in search of a lower price, via Bouvier, and in the case of the Mundi purchase, followed Bouvier’s alleged plan, laid out in an email, to ““shake [the] confidence” and “break [the] morale” of the sellers by pulling out of a planned viewing. 

Asner’s cross-examination continued in a line of questioning that may well have been inspired by Charles Dickens’ David Copperfield. “You weren’t born wealthy, is that right? You went to medical school and trained as a cardiologist? You graduated with honors and soon started a business?” 

With each milestone in Rybolovlev’s life—founding a company with his father, learning how to trade stocks, making his first million and acquiring a majority stake in the Russian fertilizer producer Uralkali that would eventually make him a billionaire—Asner asked “and when in choosing your help with these companies, lawyers, accountants you always hired competent, loyal people, right?” 

The line of questioning evolved, somewhat awkwardly at times because of the need to show documents in Russian and English, to the argument that, ultimately, Rybolovlev had no one but himself to blame. He had power of attorney for both of his art-buying entities, Xitrans and ADI. Bouvier’s main contact throughout the years was Rybolovlev’s employee, Mikhail Sazonov. The art was bought with his money in transactions he signed off on. And he never asked for outside advice from anyone other than Bouvier.

“Are you familiar with the expression ‘the buck stops here?’” Asner asked. “No. But I get it. And it’s true,” Rybolovlev said.